Several very smart analysts I have talked to seem to think it is madness for AMD to hook up with their Canadian brethren, mainly because it would antagonize their closest partner, NVidia. They are right, and it would, but where does NV run, the loving arms of Intel? Not a chance.
The whole reasoning behind this merger is nothing you would ever think of, GPU functionality on the CPU, the 'next next big thing. x86 is about to take the biggest left turn since the 286 -> 386 transition, and GPU-like functionality will be the key. I would be shocked if Intel is not doing this now, they actually do have the vision to do this, implementation seems to be the stumbling block of late. To keep up, AMD has to throw reams of non-existent engineers at it, hire a coherent GPU team with a track record of delivery, or buy that coherent team. Guess which one is possible?
To utterly make up numbers, if a GPU will accelerate 10% of your problems 500x, and cost 2x the power of a non-GPU-like CPU, it can be considered a pretty compelling case. With GPUs getting minor revs every 6-9 months, and complete architectural overhauls every 12-18, these guys can dance around traditional CPU design teams and have the phrase 'time to market' tattooed on each and every individual neuron. Each rev brings that compelling case to a larger percentage of the market, and software advances bring it closer from the other side.
Additionally, with each new GPU, the shader pipeline acquires more and more CPU functionality. What is the difference between a VS/PS pipeline and an x86 CPU, other than the ISA? How about this fall when ATI puts out the second gen converged graphics part? And how about Christmas '07 when the third gen comes out? This is what Intel and ATI see.
Intel people, unofficially, behind locked and bolted doors have made no bones at all to me about who the real enemy is for them, not AMD but NVidia. If they are not working on the convergence of these two techs, I may have to call for Intel heads again. AMD is taking the shorter but more expensive route. Because Intel is using their own internal tech, I don't expect ATI/AMD to drive a NVidia/Intel tie up.
Either way, the gen of chips around 2010 will be radically different from today's cores. The current chips are showing diminishing returns for the time and effort, and a radical change is long overdue. If AMD does not buy ATI, they will have to have a miracle happen to beat Intel in 5 years. ATI will shortcut this enough to allow them to possibly beat Intel to market too.
Crazy as it seems on the surface, I honestly don't see how AMD can not pick up ATI and survive. This is long term planning mind you, not short term. AMD has a very good sense of this, look at how the K8 chips nailed the market, and other things come out at the nick of time. Yeah, they are good, and I have the sense that Intel is good as well, this time.
The only thing that will possibly sink this is an all out revolt by NVidia, VIA, SiS and Broadcom. These guys are famous for working together [cough], so that is not much of a downside. AMD learned from the SiS near-miss last year, and is clamping down on leaks this time, hard. Today may be one of the biggest watershed days in x86 history, or it may be another hot, humid day in old Taipei. One thing for sure, Computex is never dull. Two things for sure, I believe this will happen.µ
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